The first and most important question a new business needs to answer is how to afford the equipment. Startups, SMEs, and solo entrepreneurs bang their heads on a wall of options, starting by defining how expensive machinery and essential office equipment should be to figuring out whether they can recover some of their costs. Obtaining a commercial loan could dramatically lift a lot of the worries regarding equipment matters; however, startups often struggle to convince lenders. As a result, the purchase of new equipment, which should be a strategic growth-focused investment, becomes a head-scratching problem to solve. Here are some clues to help you navigate the troubled waters of equipment investments for small businesses.
Your professional kitchen needs dedicated equipment
It’s expensive so don’t waste your money
Regardless of how much you can afford to invest in the purchase of business equipment and machinery, you need to dedicate a part of your budget to protect your assets. For large machinery, you should not only consider business premises insurance cover but also think of potential liability cover to protect your company from any equipment-related accident. Damages made to the equipment, and expensive faults can be recovered through your insurance as well as your warranty – if it is applicable.
Cute doesn’t replace hygiene
In a customer-facing environment, it can be tempting to pick equipment that not only does the job, but that also is a crowd pleaser in terms of design. Small restaurants and coffee shops are the first to fall for the Instagram trap of picking kitchen equipment that is highly fashionable instead of stainless steel surfaces, but that might be best to use in a professional environment. You need to select equipment that is not only highly hygienic but also easy to maintain. While colorful appliances and tools are a favorite to drive likes on social media – and attract customers – but you need to opt for practical and less aesthetically pleasant options.
Is second-hand okay?
Professional buyers are often worried about purchasing used equipment. Anybody who has had a negative experience on eBay understands the risks of buying second-hand. In a business environment, the risks are multiplied. However, there are some guidelines you can follow to make sure that you can get the best of used machinery. Some specs and features can make a great deal of difference between getting the machinery you need at a bargain cost or wasting money on a cheap piece of equipment that doesn’t suit your business.
Is it tax-deductible?
Equipment purchases are typically deductible from your taxes. As a business owner, you will find it advantageous to work out the best tax options with a specialist accountant ahead of committing to the purchase. Additionally, a professional advisor can also help you to find effective financing options that would enable your company to boost your assets even without a commercial loan.
Is leasing a cost-saving option?
Equipment leasing can solve a lot of long-term financial problems for startups. A lease contract can also offer tax benefits, which makes a profitable solution. Additionally, a leasing contract can be an effective strategy to enable small businesses to create funds for future purchases.
For startups, the difficulty in obtaining a commercial loan can hinder their growth strategy and especially the acquisition of equipment. However, there is a variety of options that a startup can take to build the necessary assets to approach the market.